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The 4 best secured credit cards in Canada for 2022

Do you have bad credit or no credit? Are you afraid of being denied by a regular credit card application? Find a secured credit card that can help rebuild your credit history or start from scratch.

The best secured credit cards in Canada

If you're trying to build (or rebuild) your credit in Canada, a secured credit card is a great way to get on track toward financial stability. See below for our list of the best secured credit cards in Canada for 2022.

Best secured credit card for beginners


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The Refresh Financial Secured Card is a great option for anyone looking to build their credit as a student or newcomer to Canada, or rebuild their credit after suffering a financial loss such as bankruptcy. One thing that sticks out immediately is their $200 minimum deposit, which is quite low even among secured credit cards, making this card more accessible than most. It also has a comparatively low purchase interest rate of 17.99%, but it’s good practice to never rack up interest on a secured credit card in the first place. The card’s annual fee is $12.95, plus a monthly maintenance fee of $3, making it ideal for users who want to try the card without having to put up a significant amount first. 

In addition, users will get access to financial tools such as in-house courses and free credit reports.

Of course, the card isn’t without its drawbacks. Namely, it comes with a $5 fee for ATM withdrawals and a monthly $2 inactivity charge. You’ll also have to go somewhere else once you’re ready to graduate to an unsecured credit card, as Refresh doesn’t offer them.


Pros:

  • Very low $200 minimum deposit makes this card one of the most accessible available 
  • The card comes with a load of financial tools such as free credit reports and financial education courses
  • Comparatively low purchase interest rate of 17.99%
  • $12.95 annual fee + $3 monthly maintenance fee is great for users who don’t feel comfortable paying a substantial amount up front
  • Interest-free grace period of 21 days

Cons:

  • Comes bogged down with a couple of pesky extra fees ($5 for ATM withdrawals and $2 monthly charge for account inactivity)
  • No ability to upgrade to an unsecured credit card with Refresh

Best secured credit card for earning rewards


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For those looking to earn rewards while building their credit, the Plastk Secured Visa Rewards Card offers the ability to earn one point for every dollar you spend on the card, earning yourself a dollar back for every 250 points you collect (although you won’t be able to redeem until you’ve amassed 2500 points). They also offer a signup promotion offering 5000 points (a $20 cash value) and 0% interest for the first three months. 

Their purchase interest rate of 17.99% and 25-day interest-free grace period are some of the best available right now, plus you’ll also receive monthly credit score updates via Equifax so you can monitor how you’re doing.

The caveats? It requires a $48 annual fee as well as a $6 monthly maintenance fee, which could scare off clients nervous about parting with that much money up front. Then there’s the hidden fees, such as a $35 charge for dishonoured payments and a 4.5% foreign conversion fee. Not to mention the fact that their attractive 17.99% interest rate shoots up to 29.99% after two missed payments. While responsible card use should eliminate concern for a couple of these things, those inexperienced with credit or trying to overcome bad financial habits may give pause before applying.


Pros:

  • Sign up bonus of 5000 points (cash value of $20) and 0% purchase interest rate for first three months
  • Ability to earn rewards on purchases
  • 17.99% purchase interest rate is one of the lowest available
  • 25 day interest-free grace period
  • Monthly credit score updates through Equifax

Cons:

  • 17.99% purchase interest rate shoots up to 29.99% after two missed payments
  • $48 annual fee and $6 monthly maintenance fee could be intimidating to users who don’t want to spend too much on a card
  • Hidden charges to watch out for ($35 for dishonoured payments, 4.5% foreign conversion fee)
  • Only reports to Equifax

Have the deposit ready

Secured credit cards need an up-front deposit for activation, and your account could be closed if it isn’t paid by the deadline. Make sure you have it ready to go as soon as you get approved

Best no fee secured credit card


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The Home Trust Secured Visa Card is a no-frills card perfect for those looking to build their credit without the added pain of an annual fee. With a minimum deposit of $500, users can activate the card and make purchases virtually anywhere, with Home Trust sending regular reports to both major credit bureaus (Equifax and TransUnion). The card’s interest rate of 19.99% is fairly standard (although there are other secured cards who offer lower rates) and for -those using the card abroad or online, its 2% foreign exchange fee is lower than you’d normally find on a card of this type. 

Those willing to fork out $59 for an annual fee can see their interest rate lowered to a very impressive 14.90%, but that may be a big ask for clients still trying to get on their feet financially. 

While it may not feature any of the perks or rewards of other cards, those who use it responsibly will find it helpful as they build up their credit and graduate to an unsecured credit card in the future. 


Pros:

  • No annual fee
  • Low foreign exchange fee of 2%
  • Reports to both Equifax and TransUnion

Cons:

  • Interest rate of 19.99% is standard for most credit cards, but there are cards with lower interest rates on the market right now
  • Interest rate of 14.90% is available, but you’ll have to pay an annual fee of $59 as well
  • Very bare bones - users won’t earn any rewards or cash back and there’s no perks

Make small purchases

Your secured credit card is there to help you slowly and steadily build credit, so don’t go overboard with spending. Make a few small purchases per month to make your monthly bills manageable

Best overall secured credit card


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Having the distinction of being the only secured card on the market to offer cash back rewards, the Neo Financial Secured Mastercard offers 5% cash back on purchases made with participating Neo partners and 1% on everything else (up to a $5000 limit per month). You’ll also receive a welcome bonus of $50 Geniuscash when you sign up by June 30, 2022. 

There’s no annual fee to pay, and its minimum security deposit of only $50 makes it quite possibly the most accessible card on this list. Other great features include the ability to increase or decrease your credit limit on demand, an insights dashboard through their app which you can use to track spending, and an auto-pay feature to ensure you never miss a bill while you’re trying to get your credit on track. 

The only visible drawback here is their purchase interest rate. While its low end sits comfortably at a standard 19.99%, it can reach as high as 24.99% depending on your credit application and province, so read the fine print on your contract and make sure you’re getting a rate you can live with.


Pros:

  • No annual fee
  • Only secured card on the market with cash back rewards - earn 5% on store purchases with Neo retail partners and 1% on everything else
  • Welcome bonus of $50 Geniuscash  (offer expires June 30, 2022)
  • Increase or decrease your credit limit on demand
  • Insights dashboard helps you keep track of your spending
  • Auto-pay feature keeps you from missing bills
  • Very low minimum security deposit of $50 

Cons:

  • Purchase interest rate can go as high as 24.99% depending on your application and home province

Pay your bills on time

Because secured credit cards report your payments to credit bureaus, it’s important to ensure your bills are paid on time. Paying your bills by their due dates every month will improve your credit score

Also consider

Monitor your score

If credit health is your goal, it’s worth the effort to monitor your score every month. This way, you can not only detect and fix any issues, but celebrate as you see your credit score improve over time

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How a secured credit card works

Once you’ve made your security deposit and completed activation, a secured credit card works just like any other - you can use it to make any in-store or online purchases you wish. And, just like a regular credit card, you’ll get a bill every month that you’ll be expected to pay on time. Whether you pay off the full balance or make the minimum payment is your decision, but it’s important to remember that a secured card’s main purpose is to help you build your credit, so try to ensure your payments are always on time.

The provider of the card should then report your payments to credit bureaus such as Equifax and TransUnion which, if you’re using the card responsibly, will slowly improve your credit score as you continue to use the card. On that note, it’s important to ensure that your issuer does report to credit bureaus, as some don’t.

How to get a secured credit card

Eligibility requirements

The great thing about secured credit cards is that nearly anyone is eligible to get one. Because these cards are geared towards young people with no credit history, newcomers to Canada, or those trying to build back their credit after a bad financial period, they are incredibly easy to be approved for and often don’t require a minimum personal income or hard credit check. That being said, there are a few basic requirements:

  • You must be the age of majority in your home province or territory 
  • You must be a resident of Canada
  • You must be able to pay the minimum security deposit for activation

What to consider in a secured credit card

Credit bureau reporting

Most people want a secured credit card for the same reason: to build or rebuild their credit and eventually graduate to an unsecured credit card. Knowing this, it’s incredibly important to ensure that the card’s provider reports to at least one Canadian credit bureau (but ideally both - Equifax and TransUnion). Your credit score can’t improve if these organizations aren’t seeing and recording your regular payments, so make this your top priority.

Minimum security deposit

Secured credit cards match your credit limit to the amount you’ve put down as a security deposit, but if their minimum deposit (some can be as high as $500) is more than you can afford, you may want to look at other, less-prohibitive secured cards. After all, that money will be tied up until you close the account, so ensure that it’s an amount you can afford to live without for an indefinite amount of time.

Annual and monthly fees

Because you’re using this card to help you get into a better financial situation, high annual and monthly fees aren’t your friend. Ideally, seek out a secured card with either no fees or very low ones. A card like this may not offer rewards or ultra-low interest rates, but if you’re serious about using it to improve your credit, neither of these features will be a factor. 

How to apply for a secured credit card

Depending on your financial institution, you may not see secured credit cards visibly offered on their website. Many larger banks do offer these cards, but you may have to call them or visit a branch in person to apply. Alternately, smaller financial institutions will typically make their secured credit cards available to apply for online. In this case, the process is quite easy.

  • Select the card you wish to apply for
  • Read the card's terms and conditions and accept
  • Submit your personal information (name, address, social insurance number, employment, etc.)
  • Wait to hear if you're approved. If so, you'll need to deliver your security deposit by cheque or bank transfer to active the card.

In the case that you're not approved, don't jump the gun and apply for another card again immediately. Each credit card application involves a hard credit check, and too many at once will hurt your credit score and further reduce your likelihood of being approved for future cards. With this in mind, wait a period of six months before applying again.

Tips for using a secured credit card

Have your deposit ready

You can’t begin using your secured credit card until you deliver your security deposit to the provider, and there’s usually a specific window of time to do that. If the deadline passes you by, you’ll lose your card before you even get a chance to use it. 

That’s why it’s important to have your security deposit together and ready to send before you even apply. If the card you want requires a higher-level minimum deposit ($400 or $500) that you don’t immediately have on-hand, either take the time to save up before applying or consider looking at more accessible cards.

 

Use the card responsibly

While it may be exciting to have a brand new credit card, it’s important to remember the end goal: improving or building your credit. Because you won’t be able to effectively do that if you spend recklessly or go over your credit limit, using your card responsibly is important.

Use the card for a few small purchases per month. Not only will this keep your account active, it will ensure you’ll be able to pay your monthly bill off in full. Do this enough times, and you’ll slowly see your credit score improve.

 

Pay bills on time and in full

Providers of secured credit cards report your payments to the credit bureaus who assign you a score, so make sure your payments are never missed and on time.

And, while you can certainly choose to pay the minimum every month (after all, it’s your own money), you’ll be running the risk of accumulating interest the more you do this. If your card has a standard interest rate of 19.99% or thereabouts, this will slowly begin to ruin any progress you’ll be making with your credit, so it’s worth it to pay your bills in full whenever you can. 

 

Monitor your credit score

Because you most likely own a secured credit card to help build your credit score, it’s worth keeping a regular eye on your progress. Sign up with Equifax or TransUnion and request your credit report monthly to see how you’re doing. Not only can you get the thrill and encouragement of seeing your score rise, you can also quickly identify and diagnose any issues that are preventing it from improving.

Secured credit cards: pros and cons

Pros

  • They’re a great way to build or rebuild your credit
  • Your credit limit is matched to the amount of your security deposit, eliminating the risk of overspending and winding up in debt
  • Nearly anyone can be approved for one, even those with bad or nonexistent credit history
  • You can sometimes earn small rewards as you spend

Cons

  • Annual or monthly fees can counteract your efforts to get financially stable
  • High purchase interest rates can become a problem if bills aren’t paid on time
  • Minimum security deposits can be prohibitive (sometimes as high as $500 up front) and you won’t be able to get it back until your account is closed

FAQ

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